One of the things incoming President Trump has promised to do is apply tariffs to vehicles (among other things) not made in the USA – ostensibly to encourage the manufacturing of vehicles in the USA. The underlying argument in favor of tariffs being that imported vehicles have an unfair competitive advantage because labor (and regulatory) costs are lower outside the USA – which is absolutely true.

Why else do you suppose GM and Ford and Ram have manufacturing operations south of the border? Hecho en Mexico? Then bring north of the border and sell here? The answer, of course, is that it’s cheaper to manufacture vehicles south of the border – which is another way of saying more profitable, as the vehicles manufactured outside the USA aren’t cheaper to buy in the USA on account of having been been manufactured in Mexico.

Note the distinction. Pagan America: The Dec... Davidson, John Daniel Best Price: $24.70 Buy New $21.09 (as of 02:26 UTC - Details)

Tariffs – which is just another way to say taxes – will do what the application of taxes always does: It will make the taxed item cost more rather than less.

If Trump follows through on his promise, what will happen is that vehicles will cost more rather than less. Not just those made outside the USA, either. A kind of rip tide will be created that increases the costs of vehicles, generally – irrespective of where they’re made. This will not make America great again.

But it will make vehicles even more expensive. Again.

There is another option but it is not likely Trump will choose it because it isn’t protectionist (or corporatist) and Trump is exactly that. He may mean well. But meaning well isn’t worth much when the outcome is terrible; viz the “beautiful” drugs that many Trump supporters don’t fault him for pushing . . . because he meant well.

So – what’s the other option?

The free market.

If one were allowed, Americans would be able to buy any of a plethora of low-cost vehicles, among them the Toyota HiLux Champ you may already know about – and know you’re not allowed to buy in the USA because the federal government says this little pick-up is “unsafe” – which  it is not. But it isn’t compliant with every Federal Motor Vehicle Safety Standard (FMVSS). The Long Emergency: Su... James Howard Kunstler Best Price: $0.25 Buy New $2.99 (as of 05:35 UTC - Details)

The distinction is significant.

A vehicle that hasn’t got turn signal lights the exact size and placement as specified by the FMVSS – or just two rather than six airbags – is not compliant.

But is it in fact unsafe?

Most people hear “unsafe” and they automatically think a vehicle so described is defective in some way; that it is likely to crash because its wheels fall off while it is moving or the brakes fail when applied or something along those lines.

But – in the context of the FMVSS, to which new requirements are regularly added – any vehicle that does not comply with all of the latest requirements is “unsafe” per the regs and for that reason illegal to sell (as a new vehicle).

hat this is absurd is easily proved.

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